The Servcorp Ltd (ASX: SRV) share price jumped as much as 12% to $3 this morning despite the global serviced office operator releasing no specific news to the market.
The share price move could be related to a sell-side broker or analyst upgrading their rating on the business or a buy-side fund manager buying up large volumes of the stock. Alternatively, it could be related to any number of other factors meaning there are more buyers than sellers for the shares today.
Even after today's rise the stock is still down more than 40% over the past year as Servcorp is facing rising competition from probably thousands of start-up shared workspace operators globally.
This competition includes the deep-pocketed WeWork shared office provider that is dominant in the U.S. and also now operates in Melbourne and Sydney.
WeWork reportedly lost US$2 billion in its most recent financial year as it aggressively fights for market share. This shows the kind of tough competition Servcorp is now facing, as it still posted a net loss of $6.1 million on sales of $164.2 million for the six months ending December 31 2018. Excluding "restructuring" costs Servcorp's net profit came in at $14.5 million.
It's also a founder led business with a strong balance sheet, which means potential investors face a conundrum as to whether the stock is "cheap" or a "value trap".
